I’m not an economist, but I do play one on TV, and, as I understand it, the gold standard is just a check against bad management producing an excess of currency and ramping up inflation. If we don’t have bad management, then we don’t need the gold standard.

From a minimalist perspective, yes you’re essentially correct. Pegging the money supply to a fixed point removes the ability of the government to adjust the money supply. Incidentally, you don’t need gold to do this.

However, the ability to adjust the money supply is one of the most potent weapons we have to combat inflation and unemployment. Gold bugs will tell you that the economy will adjust around the money supply, but our experience has shown that the adjustment is a prolonged, messy one. A floating currency is very effective in keeping recessions from turning into depressions.

Then there’s also the minor (ha ha) point that there isn’t enough gold in the world to support our economy, meaning that if we went to a gold standard (which would have to be a 100% standard, because a partial standard is little different from the fiat currency Paul is so dead set against) our money supply would shrink precipitously, plunging the economy into a depression.

Simply put, I agree with the concept of a responsible monetary policy, but I do not believe we need to use shiny rocks to make one possible.

DFCtomm on May 23, 2008 at 3:07 AM

You know, Dr. Paul’s belief in the gold standard has always interested me, mostly because buying gold was the only sound investment I’ve ever made. Whether my own meager personal financial experience is anything to base a national economy on is certainly in doubt, but it does make me interested to learn more about it.

have a problem with people who believe that all progress, changing and refining of systems ended in 1776.

RobertInAustin on May 22, 2008 at 8:06 PM

You left out my second paragraph where I said this:

I don’t believe the wealth, this country has created since we left the gold standard, could have been produced under that system. That doesn’t mean we have a perfect system, and I think it takes strong management to keep from falling into the trap of just printing money when you need it. I’m not sure we have that kind of management strength at the moment.

DFCtomm on May 22, 2008 at 6:29 PM

I’m not an economist, but I do play one on TV, and, as I understand it, the gold standard is just a check against bad management producing an excess of currency and ramping up inflation. If we don’t have bad management, then we don’t need the gold standard.

I just don’t understand why people talk about the gold standard like it’s some wacky new concept. I don’t agree with Ron Paul on this issue, but since he is proposing a return to a proven conservative standard I don’t make comments about aluminum foil hats.

The groupthink in this thread is breathtaking.

Well, we can’t all be freethinking individuals like you!

EJDolbow on May 22, 2008 at 8:49 PM

Dude, Congressfreak is my new favorite word. Don’t worry, I’ll credit you when using it.

Unless Bob Barr is battling against leprechaun immigration, it’s no contest.

joewm315 on May 22, 2008 at 7:54 PM

I know Bob Barr and he was my congressfreak.

Yes, he is just a vacant of real principles and a concrete grasp on reality as Ron Paul.

I didn’t find anything he said “nutty”, and I’m not sure why the gold standard is attacked. If it was so nutty then why were we on it for so long? It is a fiscal policy that works, but like any system it has advantages and disadvantages just as our current system does.

DFCtomm on May 22, 2008 at 6:29 PM

I have a problem with people who believe that all progress, changing and refining of systems ended in 1776.

I have no problem saying I agree with them on limited government, reduced spending and taxation, increased personal freedoms ect… it is just the never ending unsubstantiated conspiracies that IMO ruin whatever good points they have. Which is a shame with Bush spending like a Drunken Sailor on worthless things like aid to Africa.

I hate to say this, but Bob Barr is as nutty as Ron Paul.
funky chicken on May 22, 2008 at 7:41 PM

No way. You just heard Dr. Paul and his friend reference the minutes from a meeting of an imaginary commission. Unless Bob Barr is battling against leprechaun immigration, it’s no contest.

Of course, either does Barry H Obama, but that’s a whole different story.

Hmmmm

Lemme think of something really obnoxious. I don’t know how to say ‘he is a clinical moron with nice suits’ in any way that might not offend the Paulnuts.

Lemme think it over.

Oh…. get a kick outta this…

http://wonkette.com/tag/country-above-self/

DFCtomm on May 22, 2008 at 6:29 PM

be careful of your steps friend, the gang here on Hot Air don’t take kindly to anybody who says anything but insulting, and demeaning things about Ron Paul, his supporters, Alex Jones, and his listeners.

I don’t believe the wealth, this country has created since we left the gold standard, could have been produced under that system. That doesn’t mean we have a perfect system, and I think it takes strong management to keep from falling into the trap of just printing money when you need it. I’m not sure we have that kind of management strength at the moment.

Chew on that.

Sullivan now, of course, endorses Obama.

Okay, stop chewing.

Chewing and laughing simultaneously can rupture your spleen.

joewm315 on May 22, 2008 at 4:26 PM

Every party is entitled to their own version of Robert Byrd